On August 27, 2001, a federal jury convicted Craig L. Smith, age 51, of Long Beach, California, of obstructing an investigation by the Securities and Exchange Commission into alleged insider trading. The United States Attorney for the Central District of California prosecuted the two week jury trial before United States District Judge Lourdes G. Baird.

The evidence presented to the jury at trial showed that Smith had participated in the purchase and sale of securities of Ancor Communications, Inc. in December 1999. When the SEC attorney investigating the transaction contacted Smith about the trades, Smith falsely claimed that he had purchased the securities on his own based on a tip he received from an unknown person. In fact, the transactions had been executed by Brian E. Pridgeon, age 37, of San Jose, California, who at the time was a marketing engineer at Intel Corporation. Smith's business partner, Stephon A. Carradine, age 38, of Long Beach, California, is Pridgeon's cousin. The evidence showed that Pridgeon purchased the Ancor securities for Smith and Carradine based on material, non-public information that he misappropriated from his employer. Pridgeon also purchased Ancor securities in other brokerage accounts in his name and those of other family members.

Pridgeon pled guilty in federal court to insider trading charges in this case before the trial began. While the jury convicted Smith on the obstruction of justice charge, the jury acquitted Smith and Carradine on counts of conspiracy and securities fraud.

Pridgeon is scheduled to be sentenced on the securities fraud conviction on December 10, 2001 before Judge Baird. Smith is scheduled to be sentenced on the obstruction of justice conviction on November 5, 2001. The Securities and Exchange Commission's civil action against all three defendants is pending in federal court. See Litigation Release 16676, September 1, 2000.